Trump Hush-Money Trial
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Letitia James said in court papers that the California company providing the guarantee was not qualified to do such deals in New York.
Ben Protess and
The New York attorney general’s office on Thursday took exception to a $175 million bond that Donald J. Trump recently posted in his civil fraud case, questioning the qualifications of the California company that provided it.
The dispute stems from a $454 million judgment Mr. Trump is facing in the case, which the attorney general’s office brought against the former president and his family business. The attorney general, Letitia James, accused Mr. Trump of fraudulently inflating his net worth, leading to a monthslong trial last year that ended with a judge imposing the huge penalty.
Mr. Trump had to obtain the bond as a financial guarantee while he appeals the penalty — or else open himself up to the possibility that Ms. James would collect. Without a bond in place, she could have frozen his bank accounts and begun the complicated process of trying to seize some of his New York properties.
Mr. Trump appeared to stave off this calamity on Monday when he posted the $175 million bond from the California firm, Knight Specialty Insurance Company. Although he was originally required to secure a guarantee for the full $454 million judgment, an appeals court recently granted him a break, allowing him to post the smaller bond.
By providing the bond — which is a legal document, not an actual transfer of money — Knight essentially promises New York’s court system that it will cover $175 million of the judgment against Mr. Trump if he loses his appeal and fails to pay. In return, Mr. Trump pays a fee to Knight, and pledges it a significant amount of cash as collateral.
Now, however, Ms. James is raising questions that could imperil the deal with Knight, which is owned by Don Hankey, a billionaire who made his fortune with subprime loans. And the judge in the case, Arthur F. Engoron, has tentatively scheduled a hearing for April 22 to discuss the bond.
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Letitia James, the Attorney General, Objects to Trump’s Bond Deal – The New York Times
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